[00:00:09] Speaker 00:
Okay.

[00:00:10] Speaker 00:
The next argued case is Chaffin against Braden, number 162572, Mr. Davis.

[00:00:18] Speaker 02:
Good morning, Your Honor.

[00:00:19] Speaker 02:
May it please the Court.

[00:00:20] Speaker 02:
My name is Lee Davis.

[00:00:21] Speaker 02:
I'm here from Houston, Texas today on behalf of the appellant, Mark Chaffin.

[00:00:26] Speaker 02:
And today I'd like to cover the two main issues in this case.

[00:00:30] Speaker 01:
And the first is... Isn't really the only main issue, the claim construction question?

[00:00:34] Speaker 02:
That is really what we get down to.

[00:00:37] Speaker 01:
If we disagree with you on claim construction, you lose on infringement.

[00:00:42] Speaker 02:
On infringement, that's correct, Your Honor.

[00:00:45] Speaker 02:
I do not believe, even if we lose on claim construction and on summary judgment, that this was an exceptional case.

[00:00:50] Speaker 02:
But you're right.

[00:00:51] Speaker 02:
If the district court's implicit claim construction is correct, then summary judgment was correct.

[00:00:58] Speaker 02:
So I'll cover the claim construction, which compelled the district court summary judgment order of non-infringement.

[00:01:05] Speaker 02:
And then I'd like to cover the district court's abuse of discretion and awarding fees in this case.

[00:01:12] Speaker 02:
The key disputed term here is continuously draw, which is in all three of the asserted independent claims.

[00:01:18] Speaker 01:
Can you say that means to move by suction?

[00:01:21] Speaker 02:
We submit that that means to move by suction.

[00:01:24] Speaker 01:
OK, so when the Bible refers to hewers of wood and drawers of water,

[00:01:28] Speaker 01:
Those people are not just dropping a bucket into the well and pulling it up.

[00:01:35] Speaker 02:
I suppose that they are dropping a bucket into the well and moving that water towards them as they draw it from the well.

[00:01:42] Speaker 01:
Right.

[00:01:42] Speaker 01:
That's not by section.

[00:01:44] Speaker 01:
It's by drawing water.

[00:01:46] Speaker 02:
I'm sorry?

[00:01:47] Speaker 01:
That's not by section.

[00:01:48] Speaker 01:
It's by drawing water.

[00:01:50] Speaker 01:
They're drawing it up.

[00:01:51] Speaker 02:
Well, it's moving towards themselves, but it's by force.

[00:01:55] Speaker 02:
And so in that case, the force would be them pulling it up with their arms.

[00:01:58] Speaker 02:
I mean, the word draw is a verb that means to move by force.

[00:02:02] Speaker 02:
In our case, the force is suction that's created in the venturi.

[00:02:07] Speaker 01:
So it could be lots of things, in other words.

[00:02:09] Speaker 02:
It could be lots.

[00:02:10] Speaker 02:
It could be many different forces.

[00:02:11] Speaker 02:
But in any case, the force is moving whatever the object that it's acting on towards the drawer, so to speak.

[00:02:19] Speaker 04:
In the district courts, talking about having, when you say moving by suction, well, what are you moving?

[00:02:27] Speaker 04:
That's correct.

[00:02:28] Speaker 04:
And so it seemed to me the district court was saying the chlorine has to be pure chlorine.

[00:02:32] Speaker 04:
If it's chlorine in a mixture with gas, for example, then it would not be continuous.

[00:02:40] Speaker 02:
That's correct.

[00:02:40] Speaker 02:
The district court, in its summary judgment order, seems to raise this implicit construction or interpretation that that term means a continuous stream or a continuous flow of fluid, an unbroken flow of fluid.

[00:02:54] Speaker 02:
Unbroken flow of chlorine.

[00:02:56] Speaker 02:
Of chlorine, correct.

[00:02:58] Speaker 02:
And that's simply not supported by the intrinsic evidence or required by the patent itself.

[00:03:06] Speaker 02:
And so our proposed construction, continuously moved by suction, is supported fully by the intrinsic record.

[00:03:14] Speaker 02:
As you read the claims.

[00:03:16] Speaker 01:
But you just agreed with me that the plain and ordinary meaning of continuously draw is not necessarily continuously moved by suction.

[00:03:27] Speaker 01:
It's by force.

[00:03:29] Speaker 02:
By force, and in this case, the force is the suction that's created in the Venturi.

[00:03:34] Speaker 01:
Could be something else.

[00:03:35] Speaker 02:
Yes.

[00:03:36] Speaker 02:
It could be something else in another system, but not in this system.

[00:03:39] Speaker 02:
Because this system uses sewage as it's recirculated by the pump.

[00:03:43] Speaker 02:
When the pump is running in this septic tank, in this storage mixing tank, as the pump is running, it's recirculating the sewage through this recirculation pipe.

[00:03:51] Speaker 02:
There's a Venturi in that recirculation pipe.

[00:03:54] Speaker 02:
The venturi has a supply line that goes down to this chlorine supply canister.

[00:03:58] Speaker 02:
So as you're creating vacuum in this venturi, you're drawing suction up from the chlorine supply canister.

[00:04:05] Speaker 02:
And so the force in this case, in this system, is a suction.

[00:04:09] Speaker 02:
It's a vacuum that's created in the venturi.

[00:04:11] Speaker 04:
If the chlorine canister was entirely full of chlorine, like to the lid, then when you're drawing out with a venturi effect, you're going to be drawing something pretty close to pure chlorine.

[00:04:25] Speaker 04:
Aren't you?

[00:04:26] Speaker 04:
And then as the volume in the canister declines and gas, air, includes air, aren't you in necessity going to be drawing some gas along with the chlorine?

[00:04:37] Speaker 02:
You are.

[00:04:37] Speaker 02:
And we... As a result of the Venturi effect.

[00:04:40] Speaker 02:
That's right.

[00:04:40] Speaker 02:
As you get lower and lower, as you get... You get more and more gas.

[00:04:44] Speaker 02:
That's exactly right.

[00:04:45] Speaker 02:
And our position is that's okay.

[00:04:47] Speaker 02:
As long as that pump is running and you have a suction that's being created in the system,

[00:04:51] Speaker 02:
you're going to be drawing chlorine out.

[00:04:54] Speaker 02:
Now when the canister is empty, obviously you're not drawing any more chlorine, but at that point it's empty, you've got to refill it.

[00:05:00] Speaker 02:
But so long as there's chlorine that that suction has access to and that it can reach, you are continuously drawing chlorine, whether it's a full stream of chlorine or whether it's chlorine mixed with air as you get closer to the bottom of the storage supply canister.

[00:05:15] Speaker 04:
So when Mr. Lin was asked about whether there was a break, wasn't it Mr. Lin?

[00:05:21] Speaker 04:
He was saying, well, you didn't think it was possible while the machine is working, because you're always going to be drawing some chlorine in the gas until it's empty.

[00:05:28] Speaker 02:
Well, that's right.

[00:05:28] Speaker 02:
And that was a specific hypothetical posed in his deposition.

[00:05:34] Speaker 02:
Mr. Nguyen, if there were an identifiable break, would there be infringement?

[00:05:39] Speaker 02:
And I believe he said, well, what's an identifiable break?

[00:05:41] Speaker 02:
And the example given was- He says, I don't know how physically.

[00:05:44] Speaker 02:
I don't know how physically this could occur.

[00:05:46] Speaker 02:
And that was in response to, well, let's say that for a minute it draws chlorine.

[00:05:49] Speaker 02:
And then for the next minute, an entire next minute, it just draws air.

[00:05:53] Speaker 02:
And then it starts drawing chlorine again.

[00:05:55] Speaker 02:
And he said, well, I don't even know how physically that could occur, other than maybe, I think as we said in the brief, other than maybe shutting it off with a check valve, which is in the prior art.

[00:06:04] Speaker 02:
I don't even know how that could occur.

[00:06:05] Speaker 02:
But yeah, if you had an identifiable break of a full minute long, you probably wouldn't have any infringement here.

[00:06:12] Speaker 02:
As you look at the videos that we submitted with the appendix and the other evidence, you can see that there is never a full minute that chlorine is not being drawn.

[00:06:22] Speaker 02:
It's always being drawn, so long as there is chlorine in the supply canister.

[00:06:27] Speaker 04:
And in both iterations of the Akira's devices, am I correct in understanding that there is initial draw of what you would call

[00:06:37] Speaker 04:
considerable amount of chlorine, because that's what's pulling off the top.

[00:06:40] Speaker 04:
And then when you emptied out part of the canister, then you start getting the mixture of chlorine and air.

[00:06:48] Speaker 02:
That's right.

[00:06:48] Speaker 02:
I'd call it an initial dose, I think, is what we refer to it as.

[00:06:51] Speaker 02:
And that's just the way that these two accused devices are constructed.

[00:06:56] Speaker 02:
They have an initial dosage canister.

[00:06:58] Speaker 02:
And then they have a supply tank that replenishes that dosage canister.

[00:07:02] Speaker 02:
And so initially, in the first 20 seconds or so,

[00:07:06] Speaker 02:
The dosage canister is exhausted.

[00:07:09] Speaker 02:
And then it's replenished from the supply canister as long as the pump is running.

[00:07:14] Speaker 04:
And it's sucking through a pinhole.

[00:07:17] Speaker 02:
Basically a pinhole.

[00:07:17] Speaker 02:
I think it's about 30 thousandths of an inch.

[00:07:19] Speaker 02:
That's right.

[00:07:21] Speaker 04:
So necessarily you're going to be getting droplets, if you will, of chlorine coming through.

[00:07:26] Speaker 02:
That's right.

[00:07:27] Speaker 02:
And as you watch the videos, you see there are different sized droplets moving along the chlorine supply tube.

[00:07:32] Speaker 02:
So we would submit that the correct construction is continuously moved by suction.

[00:07:36] Speaker 02:
That's fully supported by the intrinsic record.

[00:07:39] Speaker 02:
The district court's implicit claim construction, what we read it as an implicit claim construction in summary judgment order, just simply is not supported and contradicts the intrinsic record.

[00:07:52] Speaker 02:
I'd just like to move on briefly in my time.

[00:07:56] Speaker 02:
Before I get into my rebuttal time, obviously the summary judgment

[00:08:01] Speaker 02:
hinges on the correct construction.

[00:08:02] Speaker 02:
But I'd like to turn to the exceptional fee award finding.

[00:08:06] Speaker 02:
And I'd just like to point out that when you read the briefs and look at the records in front of this court, what we have here, which is what I just discussed, we have a good faith claim construction that's fully rooted in the intrinsic record, number one.

[00:08:21] Speaker 02:
We have well-supported summary judgment evidence that we submitted that directly supports infringement if that claim is construed the way we say it should be.

[00:08:29] Speaker 02:
And that's on the objective reasonableness prong of exceptional case finding.

[00:08:35] Speaker 02:
On the litigation conduct, and this is where it's really troubling, we think, you have a sharply worded, very aggressive, we'll concede very aggressive, pre-suit demand letter.

[00:08:51] Speaker 04:
Only thing you forgot to ask for was the jewelry that belonged to the money from the other guy.

[00:08:55] Speaker 02:
Sure, right.

[00:08:55] Speaker 02:
But the accused infringer was free to ignore that or, if he disagreed with us, to reject it, which he did.

[00:09:03] Speaker 02:
But when you look at the course of conduct throughout this litigation, you have absolutely no evidence of misconduct.

[00:09:12] Speaker 04:
Other than the perceived weakness of your

[00:09:17] Speaker 04:
case on the merits from Judge Atlas' point of view.

[00:09:21] Speaker 04:
And then second, the aggressive letter.

[00:09:24] Speaker 04:
And then I think she referenced the fact that you had brought a bunch of claims that you dismissed.

[00:09:29] Speaker 02:
And that's true.

[00:09:29] Speaker 02:
And I would like to address that just briefly.

[00:09:31] Speaker 02:
The other claims that we brought were related.

[00:09:35] Speaker 02:
They were pled on information and belief and good faith basis.

[00:09:39] Speaker 02:
Those were, number one, dropped after Discovery was closed.

[00:09:43] Speaker 02:
And number two, I think it's important to note that Appalee's

[00:09:47] Speaker 02:
expressly stated in their brief, we're not seeking any fees on these cause of action, on these other three cause of action.

[00:09:53] Speaker 02:
I mean, that's a tacit admission, I would think, that they didn't waste much time, spend much time or effort fooling with these claims.

[00:10:00] Speaker 02:
And once we realized that there wasn't evidence to support them, we dropped them.

[00:10:07] Speaker 02:
The cases that you look at, we surveyed as many post-octane fitness cases as we could in looking at them.

[00:10:14] Speaker 04:
To ask a question on this, this is one that I was asked to my clerks about, and I don't know the answer to it.

[00:10:20] Speaker 04:
Here we have a respected U.S.

[00:10:22] Speaker 04:
and the United States District Court judge sort of saying, in my court, I find that this is an exceptional case.

[00:10:29] Speaker 04:
This is beyond the pale.

[00:10:32] Speaker 04:
So what is our standard of review?

[00:10:36] Speaker 04:
Are we trying to decide what the conduct standards are in this particular district court in Texas, or are we applying a nationwide standard?

[00:10:44] Speaker 02:
Well, I think it should be a nationwide standard.

[00:10:47] Speaker 02:
I think this is a good opportunity to decide some uniformity among all patent cases and how they're determined.

[00:10:54] Speaker 02:
I don't think that an exceptional case should be that if a certain court doesn't handle as many patent cases on a day-to-day basis.

[00:11:01] Speaker 04:
Well, what happens if a district court, say, for example, has some specific rules for trying patent cases that are unique to this particular district?

[00:11:10] Speaker 04:
And the district court judge's upset is the fact that the person that they've taxed with the exceptional case violated all those rules.

[00:11:18] Speaker 04:
That would be unique to that particular case.

[00:11:21] Speaker 04:
So there are circumstances, aren't there, that would be unique to a particular court in a particular case as opposed to generalized

[00:11:29] Speaker 02:
I think that's a good point, Your Honor.

[00:11:32] Speaker 02:
I think that if there are specific local rules that a court has adopted and a litigant goes in there and violates those specific rules, then yes, if that were the case, then sure, they may find an exceptional case in that district versus a different district.

[00:11:45] Speaker 02:
In this case, there aren't certain local rules that were violated.

[00:11:50] Speaker 01:
No, but the judge was probably sort of offended by your non-negotiable letter that demanded as

[00:11:58] Speaker 01:
as Judge Clevenger says, everything except the family jewels, including inventory, list, patent rights, 10-year non-compete.

[00:12:10] Speaker 01:
And your response to that is, the law does not forbid driving hard bargains.

[00:12:15] Speaker 01:
I think I'm going to have that quote put up on my wall.

[00:12:21] Speaker 01:
The law, however, does

[00:12:23] Speaker 01:
allowed a district court to look at unreasonable conduct.

[00:12:30] Speaker 01:
And at some point, hard bargains become unreasonable.

[00:12:34] Speaker 02:
Sure, they absolutely do.

[00:12:35] Speaker 02:
And my response to that is just that as many cases as we could, we surveyed post-octane fitness.

[00:12:40] Speaker 02:
And when you look at cases where fees were awarded in exceptional conduct, you see inequitable conduct findings.

[00:12:49] Speaker 02:
true unprofessionalism, harassment, actual misleading statements made to the court, history of bringing nuisance value lawsuits.

[00:12:57] Speaker 02:
None of that occurred in this case.

[00:13:00] Speaker 02:
As we lay out in the briefing and in the record, the discovery was equal on both sides.

[00:13:07] Speaker 02:
There were no motions to compel.

[00:13:08] Speaker 02:
There was no fighting at the court about not producing things.

[00:13:11] Speaker 02:
One thing to point out is that the district court did seem to focus on, well,

[00:13:16] Speaker 02:
we refused to produce the testing results.

[00:13:18] Speaker 02:
After we sent a very detailed demand letter to the other side, they said, well, give us more of your testing results.

[00:13:24] Speaker 02:
And the pre-suit response was, well, no.

[00:13:26] Speaker 02:
Well, all of that was produced in the normal course of discovery once litigation was commenced.

[00:13:31] Speaker 02:
So nobody withheld anything.

[00:13:33] Speaker 02:
Nothing was hidden.

[00:13:34] Speaker 02:
There were no delay tactics, no motions to compel anything from either side.

[00:13:39] Speaker 02:
Once litigation started, it was as run of a mill a case as I think

[00:13:45] Speaker 02:
that you will find.

[00:13:47] Speaker 02:
I see I have about a minute and a half, and I'm well into my rebuttal, so I'll sit down and address any further questions.

[00:13:52] Speaker 00:
Okay.

[00:13:53] Speaker 00:
Thank you.

[00:13:57] Speaker 00:
Mr. Powell.

[00:13:59] Speaker 03:
Thank you.

[00:14:00] Speaker 03:
I think the key issue that we need to think about, at least when it comes to the claim construction issue, is that they had an opportunity to propose claim construction during multiple phases of the litigation.

[00:14:13] Speaker 03:
when the court asked for the disputed claim terms, all up for summary judgment.

[00:14:20] Speaker 03:
If they had prosecution arguments that would have affected the meaning of the claim terms at issue here, that was the time to present them.

[00:14:30] Speaker 03:
Instead, Mr. Schaffin consistently argued that the terms should be given their plain and ordinary meaning to the court without ever proposing a construction and without ever referencing the intrinsic records.

[00:14:41] Speaker 04:
Neither side asked for it.

[00:14:43] Speaker 03:
Neither side asked for it.

[00:14:43] Speaker 03:
And that is one distinction.

[00:14:45] Speaker 04:
The judge is flying blind a little bit into the summary judgment.

[00:14:48] Speaker 03:
A little bit.

[00:14:49] Speaker 03:
But the cases that they rely on in their briefs to support the proposition that they should have had an opportunity in the motion for reconsideration, all of those cases, there was an actual dispute at some point during the lawsuit.

[00:15:01] Speaker 03:
That's not the case here.

[00:15:03] Speaker 03:
But also, somewhat.

[00:15:04] Speaker 04:
But it's not like a situation where they would be presenting a brand new claim of instructional appeal, where you could claim you were blindsided.

[00:15:11] Speaker 04:
Their view of the claim construction was known to your side, at least by the time after the summary judgment comes out.

[00:15:20] Speaker 04:
Their side of the claim construction was... The first that we knew of their proposed claim construction was... And there was a motion for reconsideration and the judge tweaked her claim construction a little bit.

[00:15:31] Speaker 04:
And as a result of the motion for reconsideration, which suggested to me that she'd heard the arguments on both sides.

[00:15:38] Speaker 03:
Okay, I did not perceive her order on the motion for reconsideration as tweaking the claim construction, but maybe I misread that.

[00:15:53] Speaker 03:
Mr. Chaffin's reply brief contends that Mr. Braden concedes that instantaneous flow rates within the accused devices never reach zero.

[00:16:04] Speaker 03:
He does this a couple of times.

[00:16:05] Speaker 03:
He's relying on concessions, alleged concessions, that we supposedly have made in our response brief by pointing to certain charts that Mr. Wyson has cited to.

[00:16:15] Speaker 04:
The videos that I saw showed that the chlorine, as best I could see, the chlorine was always flowing in the tube in conjunction with gas, with air.

[00:16:31] Speaker 03:
That is correct.

[00:16:32] Speaker 04:
So there's actually a dispute between the experts on both sides as to whether there's ever a time when there's no chlorine present at all.

[00:16:43] Speaker 03:
I don't think that's the dispute, Judge.

[00:16:46] Speaker 04:
Well, I understand it.

[00:16:47] Speaker 04:
But as to whether that's true, I can show it to you.

[00:16:51] Speaker 04:
One side says, well, there's a time when there's never any chlorine.

[00:16:55] Speaker 04:
And the other side says, well, there's never such a time.

[00:16:57] Speaker 03:
Well, the distinction is where you're looking.

[00:16:59] Speaker 03:
Because their position is that it doesn't matter where within the accused devices that the chlorine is.

[00:17:04] Speaker 04:
So your view would be that if there's chlorine in the tube separated by air, then the air is a time when there's never any chlorine.

[00:17:13] Speaker 03:
I don't care what happens in the tube.

[00:17:15] Speaker 03:
I only care what happens either going into the Venturi device or coming from the supply canister.

[00:17:19] Speaker 04:
Your claim construction would require a pure flow of chlorine.

[00:17:22] Speaker 04:
To continuously draw chlorine would be all chlorine never mixed with air.

[00:17:28] Speaker 03:
Going into the Venturi chamber and coming from the supply chamber, my construction would be that that has to be continuous, as the claims say.

[00:17:37] Speaker 04:
Even though you know you're using a Venturi effect and you know that you're always going to get gas as you deplete the volume of the chlorine in the canister?

[00:17:46] Speaker 03:
When you're reading the claims on their face, I don't think that matters.

[00:17:51] Speaker 03:
I mean, they have interjected this idea that the judge has given some sort of an implicit construction that requires an uninterrupted stream, and I disagree with that.

[00:17:59] Speaker 03:
Now, we can think further and go, it is only logical that if there is an uninterrupted stream or a continuous stream of chlorine flow into the Venturi chamber or from the supply canister, then yes, we might assume that there is a system, or most systems, there's going to be continuous flow, continuous stream, uninterrupted stream of chlorine within the supply tube between those two points.

[00:18:21] Speaker 03:
But I'm not prepared to say that's always the case, and that's not what the claim is directing.

[00:18:25] Speaker 00:
But that's not an assumption, is it?

[00:18:27] Speaker 00:
That a specification contemplates that?

[00:18:30] Speaker 03:
It is not an assumption that specification contemplates.

[00:18:33] Speaker 03:
And I think the other issue here is that Mr. Davis has stated that the prosecution history is completely consistent with their proposed construction, but inconsistent with the judge's construction, or how she ended up doing the comparison of the claims.

[00:18:50] Speaker 03:
I don't think that's the case at all.

[00:18:51] Speaker 03:
I don't think there's anything inconsistent about what the judge did with the prosecution history.

[00:18:56] Speaker 03:
Because if you go back and look at the prosecution history, the argument that they were making to the Patent Office was simply reciting that the 071 patent does not include the claim language.

[00:19:07] Speaker 03:
And they recited the claim language verbatim.

[00:19:09] Speaker 03:
They did not assign any sort of a special meaning in the course of prosecution history to this particular claim language.

[00:19:15] Speaker 03:
There's nothing that really causes us to look beyond the face of the claims itself.

[00:19:20] Speaker 03:
They did not define the claim language a certain way in the specification.

[00:19:25] Speaker 03:
And again, I just don't think it's inconsistent with what the judge's order is in this case.

[00:19:37] Speaker 03:
I would like to make a couple of points.

[00:19:39] Speaker 04:
Is there down in Texas a sort of

[00:19:43] Speaker 04:
graduated list, graduated variety of threat letters, going from the most polite Chiwis and possibly Umaita, but we're good friends and we meet at church.

[00:19:57] Speaker 04:
And please look into it.

[00:19:58] Speaker 03:
There is no judge.

[00:19:59] Speaker 04:
All the way to this one?

[00:20:00] Speaker 03:
No.

[00:20:01] Speaker 03:
I'm not aware of anything like that.

[00:20:03] Speaker 04:
How would we know whether or not this letter stands out, cries out as being really the worst ever?

[00:20:10] Speaker 03:
Well, I don't think that it's the letter itself that's necessarily the issue.

[00:20:15] Speaker 03:
And as you noted, I mean, there's nothing in the law that prevents them from making strong demands and sharp letters.

[00:20:25] Speaker 04:
Under the 285- Do you think her order rests almost entirely then on the judge's view of the skinniness of their legal position?

[00:20:33] Speaker 03:
I think, well, the judge did say she found that the legal position to be by itself objectively unreasonable.

[00:20:41] Speaker 03:
And then she also stated separately, we find the manner in which they litigated the case to be objectively unreasonable.

[00:20:48] Speaker 03:
So I think she looked at both issues and concluded the same thing for both issues.

[00:20:53] Speaker 03:
In my opinion, I've always viewed this.

[00:20:55] Speaker 04:
Do you think if we disagreed with her on the conduct, but agreed with her on the claim construction issue, then we would necessarily affirm the award?

[00:21:07] Speaker 03:
If you disagreed with her on the conduct,

[00:21:11] Speaker 03:
I think that the objective unreasonableness of the position is enough to support fees by itself.

[00:21:18] Speaker 03:
I do not think that if you disagree on the claim construction issue that the conduct in and of itself is necessarily enough to support 285 fees because, of course, their case would be stronger than we've perceived it up until this point.

[00:21:34] Speaker 04:
Talk about... Very refreshing to have candor from counsel.

[00:21:37] Speaker 04:
Thank you.

[00:21:38] Speaker 03:
Well, we do that in Texas.

[00:21:41] Speaker 01:
I didn't wear my boots, Judge.

[00:21:49] Speaker 01:
So talk about any other conduct other than sending the letter because you were implying that.

[00:21:58] Speaker 01:
Well, I'm implying what?

[00:21:59] Speaker 01:
You were implying when you said strong letters are not forbidden.

[00:22:03] Speaker 01:
Sure.

[00:22:04] Speaker 03:
The issue is how do we determine

[00:22:09] Speaker 03:
Does the judge have the right to make an inference in terms of the motivation of the other party based on circumstantial evidence?

[00:22:16] Speaker 03:
And this court has said that they can.

[00:22:19] Speaker 03:
In this case, I think when you consider, and it's not just the strength of the letter or the words of the letter that I have issue with or that we have issue with.

[00:22:27] Speaker 03:
It's that we're not limiting the scope of our sharply worded demand letter just to the facts of this case.

[00:22:32] Speaker 03:
It's not just about infringement or the accused devices.

[00:22:35] Speaker 03:
It's about an unrelated patent.

[00:22:37] Speaker 01:
It's about a covenant, not... Yeah, it's about we want to put you out of business.

[00:22:41] Speaker 03:
Exactly.

[00:22:42] Speaker 03:
And I think that that supports the judge's inference.

[00:22:45] Speaker 01:
It's the motivation that's the issue.

[00:22:47] Speaker 01:
All right.

[00:22:48] Speaker 01:
So the contents of the letter do bother you.

[00:22:51] Speaker 01:
It's just the tone that doesn't.

[00:22:54] Speaker 03:
No, I mean, if they wrote the same demands in a very nice way, I'd still have a problem with it.

[00:22:59] Speaker 03:
I just think that the tone is particularly... The tone was indicative of the motivation behind

[00:23:06] Speaker 03:
Mr. Chaffin.

[00:23:08] Speaker 00:
It has to be the tone, doesn't it?

[00:23:10] Speaker 00:
Because that's what patent litigation does.

[00:23:13] Speaker 00:
You seek an injunction, you put them out of business.

[00:23:17] Speaker 00:
Is that any different?

[00:23:18] Speaker 00:
So it has to be the tone.

[00:23:20] Speaker 03:
That's not necessarily the way that I approach my cases, Judge.

[00:23:25] Speaker 03:
I mean, I think that if I have a legitimate dispute with a potential infringer,

[00:23:30] Speaker 03:
The first thing I'm going to do is try to get together with them and work out what the issues are.

[00:23:35] Speaker 00:
Is there a legitimate... Well, that depends on the competitive situation.

[00:23:38] Speaker 00:
Well, sure, sure.

[00:23:39] Speaker 00:
So here the competitive situation on its faces is clear.

[00:23:44] Speaker 00:
We'll put the competitor out of business.

[00:23:47] Speaker 00:
I have a patent.

[00:23:48] Speaker 00:
The statute gives me the right to exclude infringers.

[00:23:53] Speaker 00:
So doesn't it have to be the tone of the letter that affected the judge?

[00:23:57] Speaker 03:
I certainly think it affected the judge, the tone, but I don't think that that's the only thing that affected the judge.

[00:24:04] Speaker 01:
I think you're saying it's a combination of a weak cause of action with a demand that you plow salt into your fields.

[00:24:12] Speaker 03:
That is a true statement, Judge.

[00:24:16] Speaker 04:
But then there are firms that operate on a take no prisoners basis, and then there are those that don't, right?

[00:24:23] Speaker 03:
And they're free to do so.

[00:24:24] Speaker 03:
but under the revised octane fitness.

[00:24:26] Speaker 00:
This is not up to the firm, really.

[00:24:28] Speaker 00:
I want to intrude on Judge Cleveringer's question.

[00:24:33] Speaker 00:
It's the commercial relationship on which the finality, the rigor of the demand is made.

[00:24:45] Speaker 00:
Sure, but there's... If you're looking for licensees, then you look for licensees.

[00:24:50] Speaker 00:
If you're in a competitive situation,

[00:24:53] Speaker 00:
where your business is really hurting, you look for what the patent grant gives you the right to achieve with a valid patent.

[00:25:02] Speaker 03:
Sure.

[00:25:02] Speaker 03:
And we're not saying that there's anything wrong with that, but under the revised octane fitness decision from the Supreme Court, you're going into that recognizing that if you're taking that position or if your motivation looked out in that light, combined with an objectively unreasonable patent infringement claim,

[00:25:22] Speaker 03:
You are risking an award of fees under Section 25.

[00:25:26] Speaker 04:
I didn't want to interrupt you.

[00:25:27] Speaker 03:
No, no, no.

[00:25:27] Speaker 04:
My only point was we see it in the way cases are argued here.

[00:25:32] Speaker 04:
Some law firms or lawyers are more aggressive than others.

[00:25:36] Speaker 04:
That's all.

[00:25:36] Speaker 04:
True.

[00:25:38] Speaker 04:
That's what I meant.

[00:25:39] Speaker 04:
Sometimes they're just more demanding.

[00:25:42] Speaker 04:
Right.

[00:25:43] Speaker 04:
Well, what's your answer to my concern about what standard we're using here?

[00:25:48] Speaker 04:
Are we supposed to be reading

[00:25:49] Speaker 04:
these letters purely as a subject matter in this particular court for this particular judge, or are we trying to decide whether from our experience with all kinds of letters, whether this letter crosses the line somewhere as a matter of a national standard?

[00:26:06] Speaker 03:
I don't think it's a national standard issue.

[00:26:08] Speaker 03:
I think it's this judge.

[00:26:10] Speaker 03:
It's an abusive discretion standard.

[00:26:12] Speaker 03:
It's the judge's discretion that should be reviewed.

[00:26:17] Speaker 04:
But she's making a factual determination that this letter is out of line.

[00:26:21] Speaker 03:
And she has the right to do that.

[00:26:23] Speaker 04:
Out of line.

[00:26:24] Speaker 04:
But without telling us what any of the parameters are.

[00:26:28] Speaker 04:
Without telling us what in particular it was about the letter that said it apart.

[00:26:33] Speaker 04:
Because the whole test is, have you set yourself so far apart from a norm that you deserve to be taxed?

[00:26:40] Speaker 04:
And so what I had trouble with when her opinion was, I didn't know what her baseline was.

[00:26:47] Speaker 04:
I didn't know why this letter was offensive compared to other letters she's seen from patent attorneys down in her district.

[00:26:55] Speaker 03:
I understand your concern, and I agree that it's not articulated in the order.

[00:26:59] Speaker 04:
Does the district judge have to give me that baseline so I can know that there isn't clear error in the factual assessment that this letter is out of line?

[00:27:10] Speaker 03:
Well, it seems to me that if you're requiring the district judge to give you the baseline, you're effectively

[00:27:16] Speaker 03:
cutting away at her discretion to begin with.

[00:27:20] Speaker 03:
So we're moving from an abusive discretion standard to something a little bit more, something articulated by this court or high-level court.

[00:27:27] Speaker 03:
And I'm not saying that there's anything wrong with that.

[00:27:29] Speaker 03:
I'm just saying I don't see that as wrong right now.

[00:27:30] Speaker 04:
Which you do if you use your discretion.

[00:27:31] Speaker 04:
If you make clearly erroneous fact findings upon which your discretion is exercised, right?

[00:27:39] Speaker 03:
Correct.

[00:27:40] Speaker 04:
So the only way we can ever decide whether something is or is not clearly erroneous is to have a baseline in your mind of where the truth is.

[00:27:50] Speaker 03:
I understand the concern.

[00:27:52] Speaker 04:
That's an intractable problem, in a way, with our trying to decide that we can't really get inside the mind of the district judge.

[00:28:03] Speaker 04:
But that's what the abuse of discretion standard asks us to do.

[00:28:10] Speaker 03:
Any other questions?

[00:28:13] Speaker 00:
Any more questions?

[00:28:14] Speaker 00:
Thank you.

[00:28:15] Speaker 00:
Any more questions?

[00:28:16] Speaker 00:
Okay, thank you.

[00:28:17] Speaker 00:
Thank you, Mr. Paul.

[00:28:19] Speaker 00:
Okay, Mr. Davis.

[00:28:20] Speaker 02:
Thanks.

[00:28:20] Speaker 02:
I have very little time left, so I'll try to cover this as much as I can.

[00:28:23] Speaker 02:
The first part, I think there was a question about objective reasonableness, and I think one thing that's important to note is that if this Court agrees with us on the proper claim construction,

[00:28:35] Speaker 02:
and turns the summary judgment around, this court does not even have to reach the fee question because then all of a sudden there's no prevailing party.

[00:28:43] Speaker 02:
The second is the waiver issue that my colleague raised, and I think that the O2 micro case is appropriate in this instance.

[00:28:56] Speaker 02:
Both parties advanced a plain and ordinary meaning, but at some point a dispute arose as to the scope of what that claim term means, and O2 micro says that

[00:29:05] Speaker 02:
Sometimes a plain and ordinary meaning or no construction at all is going to be inadequate when it doesn't resolve the party's dispute.

[00:29:12] Speaker 02:
And that's clearly what we have here.

[00:29:14] Speaker 02:
We have an argument about what the scope of the term continuously draw is, and this term needs to be construed.

[00:29:20] Speaker 02:
Now, the cases that are cited in Appellee's brief, one relates to a new infringement theory that was raised on motion to reconsider after summary judgment.

[00:29:29] Speaker 02:
Others relate to a new claim construction raised after a jury trial.

[00:29:34] Speaker 02:
This court has stated, the Conoco case cited in our brief talks about rolling claim constructions, whereas the district court understands the technology better.

[00:29:46] Speaker 02:
You can go back and revisit what a claim term means.

[00:29:50] Speaker 02:
I say I'm out of time at this point, so there are no further questions.

[00:29:53] Speaker 00:
Let me see if there are any more questions.

[00:29:57] Speaker 00:
Do you need a last word?

[00:30:01] Speaker 02:
The only thing I would say, Your Honor, is that Octane Fitness clearly says that fee is not a penalty for not winning.

[00:30:07] Speaker 02:
And the Newegg case, that case says we can actually even be ultimately wrong, but still objectively reasonable.

[00:30:13] Speaker 02:
Thank you for your time today.

[00:30:15] Speaker 00:
Thank you.

[00:30:15] Speaker 00:
Thank you both.

[00:30:16] Speaker 00:
The case is taken under submission.

[00:30:19] Speaker 02:
All rise.